Theft by design: privatization pushes NY home health aides to seek relief at the local level


Credit: Elisa Rolle

In the lead-up to the September 6, 2022 Committee on Civil Service and Labor hearing, worker, patient, and provider advocates mobilized their support. The topic was legislation that would end the 24-hour work shift for home health aides in the 5 boroughs, Int. 175.

A coalition of advocates called the Ain’t I a Woman campaign was one of the most vocal groups in favor of the measure, holding a widely publicized rally outside of the union 1199 SEIU’s office. During the hearing, workers spoke of systemically garnished wages, exhaustion, and poor health, which a 12-hour cap would curtail. 1199, which represents many aides in the state, opposes the bill. While expressing sympathy for the rank-and-file cause, union officials argue that the state legislature is the proper arena for these safeguards to be debated as Albany controls Medicaid reimbursements, a vital funding source that providers rely on to pay workers and cover patients. This tension in the street over best tactics to win better workplace conditions, plus indecision over a state or city-based route, and the desperation felt by a precarious workforce was not new.

Historically under-resourced, home care jobs are often filled by immigrants, with 63 percent identifying as people of color and approximately half relying on public assistance to make ends meet. According to the Bureau of Labor Statistics, New York State share of home health aides has ballooned to include 478,620 as of May 2021, and yet the industry is struggling to keep pace with America’s rapidly aging population, a phenomenon termed as the “Silver Tsunami.” “We’re facing the worst worker shortage in the country,” says Ilana Berger, the New York State Director of Hand in Hand, a domestic worker advocacy organization. (Hand in Hand opposes Int. 175.) 

With COVID-19 raising the profile of essential workers like home aides, the strain on the home care industry has been on full view for the nation. Berger says; “as workers who did have to go to work, they faced a lot of risks, literally risking their lives to go to work. Many did because the people who depend on them depend on them for their own lives.” 

While organizers have sought out pressure points at all levels, the role of the Governor’s mansion in Albany to fund the system as a whole cannot be understated. This article looks at the damage done to home care during recent shifts in state power. It incorporates stakeholder interviews and testimony submitted for a 2022 city council resolution seeking to limit 24-hour shifts for care workers. This article also looks at former Governor Andrew Cuomo’s successful campaign to privatize state Medicaid dollars in the 2010s within the context of the academic theory of path dependency, detailing the administrative cuts and their resulting harms on home care workers and patients.

Path Dependency and the Home Health System

Path dependency, conceived by Paul A. David in the 1980s, theorizes how systems become resistant to change when rules and regulations within them begin to pile up. While path dependence’s critics believe the theory underestimates individual agency and the ability to self-govern, certain tenets of the theory are useful for contextualizing New York industrial relations. Rosemary Batt, John Kallas, and Eileen Appelbaum studied differing conditions among healthcare workers in the cities of Buffalo and Rochester due, in part, to path-dependent legacies set in motion during separate union negotiations. Initial contracts ratified at hospitals in each city established baselines for future conversations about workplace conditions, ultimately leading to unique workplace standards in each city. The researchers conclude that the two workplaces “followed divergent paths due to path-dependent differences in the economic, ideological, and political power between employers and labor.” Batt, Kallas and Applebaum, p.428.

Elements of path-dependency explain why the home care system runs the way it does and where the power to alter it lies. In her interview with The Urban Review, Berger explains how white supremacy shaped Federal legislation concerning worker’s rights during the New Deal and whom the legislation would benefit. When the Fair Labor Standards Act (FLSA) was debated and ultimately passed in 1938, Berger notes that the “Southern delegation did not want to include domestic workers and farmers” under its intended minimum wage and wage theft protections. Domestic workers, a predominantly Black workforce at the time, were up against the legacy of slavery championed through a segregationist legislative block that successfully excluded them from bills like this one. 

Relegated to second-class status under Federal law, home care workers organized through groups like the Household Technicians of America in the 1970s and unions like 1199SEIU in New York in the 1990s, seeking to standardize conditions and wages. Advocates have continued pushing for national reforms, while also pushing for changes in state legislatures and in city councils as the Ain’t I a Woman campaign has. 

The home care industry, whose workers typically support older adults and disabled individuals, is primarily funded through each state’s allocation of Medicaid dollars. At their core, home care services are not oriented toward recovery, but rather toward the ability of a person to live a dignified life. Bryan O’Malley, Executive Director of care provider Consumer Directed Personal Assistance Association of New York State (CDPAANYS), says; “If you’re a quad[riplegic] today, you’ll be a quad in six months and you’ll be a quad in a year, and if not, I’m sure we’ll read about it on the front page of The New York Times.” (CDPAANYS opposes Int. 175).

Under former Governor Andrew Cuomo’s leadership, the system through which the state approves and provides Medicaid reimbursement for home care services has been radically altered. These more recent changes set up an array of path-dependent guardrails against interventions like Int. 175, which will later be discussed. 

The early promise of managed care

Prior to the 2010s, counties in New York State assessed patient needs and allocated funds to agencies and municipalities providing home care. 

“In the 80s, the system was dominated by a city-run program through the Human Resources Administration,” says Rick Surpin, who co-founded the provider Cooperative Homecare Associates (CHCA) in 1985. “It was a highly regulated, highly controlled program.” 

At the time, Surpin’s role with the Community Services Society considered worker-cooperative business models in New York City as a means of building stable employment for the working class. Recalling a time when a nurse told him that home care was “‘dirty work’, Surpin saw an opportunity to improve the quality of the job, wages, and benefits for home care workers through CHCA. The organization found success in training and empowering workers and providing care to patients primarily located in the Bronx. It continues to operate to this day. 

In the 1990s, Surpin became an early proponent of managed care plans as a means of finding flexibility within a system dominated by New York City’s more stringent system. He founded Independence Care System (ICS), as a private alternative to the state’s county-run model; “Managed long-term care was a black box and you could fill it with your own values. You didn’t have to run it like insurance. And we had a lot of freedom in the early years because the Department of Health treated it as a marginal program. They didn’t have a major agenda for it. They let the managed care plans develop their own identity.” For ICS, that identity anchored on meeting the needs of people with disabilities, a group he saw as needing more flexibility than the city’s rigid regulatory framework allowed. Through ICS, Surpin saw managed care as a community-based distributor that could allocate reimbursements to innovative providers like CHCA.

ICS was one of the first managed care plans authorized by New York State to provide Medicaid services beginning in 2000. More plans got approved in the ensuing decade, and by 2010, Surpin wrote a paper calling for municipalities to continue serving the high-needs, most vulnerable patients, while managed care could assist those with lesser needs, thus “developing new service models for improving health outcomes for individuals with chronic illnesses and disabilities.”

Photos from the opening of the new Delta Air Lines terminal in LaGuardia Airport in Queens, NY, on Tuesday, Oct. 29, 2019. (Chris Rank for Rank Studios)

Shifting priorities: austerity and privatization under Cuomo’s MRTs

By the early 2010s, New York’s spending on Medicaid was national news, with newly elected Andrew Cuomo promising cutbacks. “They came into power believing that New York City home care costs were out of control,” representing 65 percent of total national Medicaid expenditures, according to Surpin. Burgeoning managed care plans of the time continued to heavily rely on the state’s reimbursements.

“Private insurance doesn’t cover home care,” O’Malley explains. “It covers 40 days of home care, that’s it. If you need long-term home care, it’s Medicaid.” While a national trend of increased medical spending had ballooned for some time, Cuomo acted with urgency, quickly forming the Medicaid Redesign Team (MRT), a state-sanctioned board of insurance, hospital, and union leaders tasked with developing a plan to cut costs. This would be the first of two MRTs with the second coming later in 2020. 

The biggest structural shifts of MRT I were, first, the move toward mandating managed care plans for the vast majority of patients requiring home care services. From O’Malley’s view, this meant shifting “hundreds of thousands of people from traditional fee for service that was administered through the counties.” These private plans were entitled to take fifteen percent of every Medicaid dollar they received. Second, MRT I introduced a global cap that only allowed reimbursements to grow by the Consumer Price Index for the Northeast region, which, in O’Malley’s words, “put a box around what Medicaid spends.” This amounts to an average of around three percent on an annual basis. 

As a whole, the first redesign team cemented this added cost of fifteen percent for managed care plans, which dwarfed the average three percent annual increase in spending that the state could authorize under the new global cap. MRT I effectively cut funding available to providers, and ultimately, according to O’Malley, ” the workers who staff them.” The stresses on the system pervaded through the decade and led the Cuomo administration to convene an MRT II that brought about more explicit eligibility cuts to home care services. For O’Malley,  “under 10 years of Andrew Cuomo, what we saw was anything from neglect to active harm for the home care sector.”

The proliferation of managed care plans over the 2010s saw six firms amass wide geographic footholds over Medicaid-funded home care plans and a growing encroachment of private equity seeking a share of federal health dollars. Upon reflection, Surpin’s black box vision of managed care plans took a turn; “I would say that over time I was proved wrong, in retrospect. It wasn’t that that theory wasn’t true. It was never tested.” With a profit-driven incentive introduced to home care safety net spending, diverging priorities emerged.

Int. 175: “Intent doesn’t determine outcome”

New York City Councilmember Christoper Marte’s Introduction 0175-2022 has garnered 27 cosponsors and seeks to end the use of 24-hour shifts within the five boroughs. It was met with an emotional hearing in Fall 2022, with well over one hundred came out to testify on the bill, and a near 50/50 split of those speaking for and against its passage. 

An analysis of the over 250 pages of written testimony found stakeholder groups included a deeply divided mix of workers, patients, providers, nonprofit organizations, labor unions, elected officials, and agency staffers. Breaking the supportive and opposing sides into two narratives demonstrates the tensions between the need for immediate relief for frontline workers and patients and the legal limitations due to pre-existing state policy. 

Supporters of the “No More 24” Act

In their testimony, Ain’t I a Woman refers to Int. 175 as the “No More 24″ Act and takes aim at current State Department of Labor (DOL) overtime regulation, which they argue “maintains that home health aides are eligible for only thirteen hours of pay during a 24-hour shift if they receive eight hours of time to sleep and three hours of time to eat meals. However, most home care workers simply do not receive this time to sleep and eat because their clients have acute needs and require near constant attention.” Ain’t I a Woman’s testimony, coauthored with National Mobilization Against Sweatshops and assembled with the support of CUNY School of Law students, acknowledges active legislation at the state level seeking to increase protections for workers, though they note that “such efforts have stalled, and the City Council remains best positioned to advance this cause.”

Outside of political advocacy organizations such as the Grand St. Dems and the NYC-DSA – Socialist Feminist Working Group, dozens of workers and patients forcefully wrote and testified in favor of Int. 175. 

Both patients and workers discussed the day-to-day realities under the scarcity-ridden system orchestrated through Cuomo’s MRTs. Self-identified patient Kaitlin Mui and many others spoke in solidarity with the care workers they rely on: “​​It deeply pains me that these home care workers who dedicate their blood, sweat, and tears to their patients are being repaid for their service with stolen wages and detrimental health problems.” Worker ​​Fengjin Zhu wrote: “24-hour work is a kind of torture, but many workers like me have no choice but to do it, because if you refuse, the employer will stop giving you assignments, so you lose your job very quickly.” 

“Nonetheless, severely flawed”

Those who testified in opposition expressed both sympathy with supporters and frustration and the system. They include independent living service providers like the Center for Independence of the Disabled, and the nonprofit legal services organization Legal Aid Society, Civil Practice. Perhaps the most succinct opposing testimony was submitted by New York ADAPT patient advocate Nina Bakoyiannis who recognizes the state’s role in deteriorating workplace conditions:

*We have to keep in mind too that managed care organizations and companies are INCENTIVIZED to assign live-in cases instead of split twelve-hour shifts because they only pay our workers for thirteen hours of work for live-in care. That is ABHORRENT. However, this bill does NOTHING to address the root of this problem…. The disability community has come too far to suffer this massive of a setback. Medicaid is a STATE and FEDERAL SYSTEM: City Council creating Medicaid policy is MASSIVELY inappropriate and will violate federal and state laws.”

A couple of unions like 1199 SEIU submitted opposing testimony as well, reading; “We applaud the aim of Int 0175-2022…Without funding, managed care plans and providers – the vast majority for-profit — will have a powerful financial incentive to abandon the highest need consumers, moving them to nursing homes where Medicaid pays fee for service.”

Soji Adu, the Deputy Director of the Bronx Independent Living Service, summed up the jurisdictional critique: “The tension between State and City funding, or lack of City funding further exacerbates the potential damage this Bill will indeed cause.” Int. 175 awaits action in the City Council as advocates look to a state with an entrenched austerity regime.

A recent pay raise in theory 

In 2017, a coalition of workers, patients, and providers began organizing as the New York Caring Majority. Baked into 2022 budget negotiations, Caring Majority saw a level of success through an increase of $3 an hour for home care workers made possible by a $7.4 billion infusion of funds at the state level. A $2 hourly increase came this fall and a subsequent $1 increase follows in 2023. Of the pay bump, Berger says; “We won the biggest investment in home care in decades. It wasn’t everything we wanted, but what changed was our organizing in every part of the state.” (Hand in Hand is a supporter of the Caring Majority’s Fair Pay for Home Care campaign.) 

However, without raising the amount of funds delivered through the system, managed care plans and providers lack incentive to make these wage increases a reality. O’Malley anecdotally spoke of a worker who called him a month after the pay bump kicked in. The worker “got a $2 an hour raise, yet saw his paycheck go down because the agency wasn’t getting additional funding passing through from the managed care plans, so the provider cut overtime.” The constraints of privatization have muddled the new policy’s effectiveness. 

Advocates set sights on insurer profiteering

Without restructuring the underlying system administered at the state level, well-intentioned legislation like Int. 175 or simple wage increases threaten unintended consequences within a safety net system now helmed by managed care plans and driven by their profit motives. Berger sees a fundamental change to the role of managed care plans as key to any reforms going forward; “We’re looking at the privatization of Medicaid and the unnecessary tax dollars that get sucked into the pockets of private insurance companies. We want to see as much of that money actually making it out to the providers and the workers.”

Reflecting on the past ten years of state policy, Surpin says “I actually have come to believe that personal care should be taken out of managed care. I don’t think that will happen, certainly not easily and certainly not soon.” He points to California’s consumer-directed program as a model for the future. 

Regardless of the exact model, Berger knows what it will take to build an equitable home care system that treats patients and workers with dignity; “Organizing, organizing, organizing, that’s it.”

Emmet Teran is in his final semester of Hunter’s Urban Policy and Leadership Masters program. His academic research centers on workplace democracy, cooperatives, and wage theft.

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